The goal of any real estate investor is to earn as much as possible with minimal risk. This is only possible if you know how to make smart choices. The following three things make for an excellent real estate investment to help you get started.
First, you need something with a good return. Real estate is an illiquid asset that requires you to minimize on your liquid assets. You need to strive to get a return rate that is the same as what it was on your liquid assets. In other words, you are looking for a property with potential cash flow, rather than a money pit.
In terms of real estate, therefore, you should look not for appreciation but rather for cash flow. Calculating your cash flow means you need to work out how much money from your rental is left after you have paid for all the necessary expenses. The best possible investment allows you to leave your cash flow untouched in a bank account somewhere. Additionally, as your rent goes up over time, so will your cash flow. If you have a good mortgage construction, where your payments stay the same, this is even better. You should make sure that at least 20% of the money you get is cash flow. There are a number of free to use cash flow calculators available online and you should use these at much as possible.
These are the great properties you should look for if you want to invest in real estate. You want a property that requires minimal maintenance and management. Unfortunately, this isn’t always as easy as it may seem. You need to have the time available to actually find these properties. You will need to look into all your available options and research and analyze them properly. In many cases, someone who wants to invest in real estate is impatient to actually get started. You should never invest in something that isn’t as secure as it can be, even if you have been waiting for a long time. Unfortunately, a poor investment decision in the world of real estate can be incredibly costly and it will be hard, if not impossible, to ever see a positive return.